£2bn Green Homes Grant and £1bn Public Sector Decarbonisation Scheme open for applications
The Department for Business, Energy and Industrial Strategy (BEIS) has officially launched £3bn of initiatives aimed at improving the energy efficiency of housing and public sector buildings.
Announced at the Summer Economic Update in June as part of the UK’s Covid-19 recovery package, the £2bn Green Homes Grant and £1bn Public Sector Decarbonisation Scheme are designed to tackle emissions from existing buildings in line with national climate targets, while creating jobs in the retrofit sector.
The Green Homes Grant scheme covers two-thirds of the cost of verified energy-saving home improvements for those who do not live in social housing. This proportion rises to 100% for the poorest households, with each household able to claim a maximum of £10,000. Polling during the summer revealed that at least 600,000 households are planning to apply for a grant.
BEIS believes that homes which are granted funding will save up to £600 per year on energy bills and that the scheme will create around 100,000 full-time equivalent jobs.
The Public Sector Decarbonisation Scheme (PSDS), meanwhile, is open to central government departments, local authorities and other public-sector organisations including NHS Foundation Trusts. It will provide grant funding for projects that are verified to improve energy efficiency and decarbonise heat. The amount granted will be assessed on a case-by-case basis by Salix finance.
According to BEIS, the PSDS will support up to 30,000 new jobs.
Both the Green Homes Grant and the PSDS are running for 12 months. A smaller grant package of £50m has also been made available for a demonstrator project to upgrade the energy efficiency of 2,000 social homes. Once the benefits of this scheme are proven – BEIS expects residents to see their energy bills cut by between £300 and £500 – it will develop a broader scheme.
Chancellor Rishi Sunak said the schemes have been designed to deliver on the Conservative Party’s commitments to support jobs through the pandemic and to improve the environment in the long-term. On the latter, its overarching commitment is to leave the environment in a better state than when David Cameron was elected in 2010, replacing Gordon Brown.
“We’re giving homeowners, landlords and local authorities the funding they need to hire local tradespeople and make our homes more energy-efficient,” he said. “By supporting the green van men and women, we’ll save money, save jobs and save the planet.”
Last week, the Treasury’s spending review – which will be used to inform the decisions it will make in the coming months and at the 2021 Budget – officially closed.
A key contribution on retrofitting buildings was made by UK100. The organisation put forward an analysis outlining how £5bn of additional government funding for related sectors could attract £40bn of investment from the private sector over the course of this Parliament. With this level of finance, some 455,100 jobs could be supported.
The Conservative Party has vowed to allocate a total of £9.2bn to energy efficiency over the course of this Parliament. Buildings are attributable to around 40% of the UK’s energy use annually and one-third of its greenhouse gas emissions. They have repeatedly been cited by the Committee on Climate Change (CCC) as a key challenge on the road to net-zero.
Closing the loop on landlords
Also announced by BEIS this week were new measures to help improve the energy efficiency of rented buildings – a key bugbear for the CCC and for many occupants alike.
The Department is set to mandate that all rented homes comply with the Energy Performance Certificate (EPC) to Band C standard by 2025 – a regulation that will extend to cover all rented buildings from 2028. At present, just one-third of homes and one-quarter of offices meet this standard.
Landlords will be required to pay up to £10,000 per home to meet the 2025 target, up from the current cap of £3,500. They will be allowed to apply for the Green Homes Grant to help meet this total. BEIS estimates that £4,700 is the average amount that landlords will need to spend per property to meet the requirement.